2018 Better World MBA Issue

Making the grade

There isn’t a business on the planet that doesn’t require an executive to be mindful of environmental and social impacts.

Petroleum and mining companies, working on the edge of human civilization, have long faced criticism for changing landscapes and discharging waste. Tech firms, which might seem insulated from scrutiny because they’re headquartered in big cities, own electricity-hungry data centres and source their metals from mines in the developing world.

If and when a media outlet uncovers a practice that the public deems subpar, a CEO needs to know how to defend the company’s actions, or know how to improve.

What that CEO learned in school is going to matter a whole lot in that moment.

Since its origins in the Ivy League schools of the U.S. Northeast, the master of business administration degree has become the academic gateway for people looking to run or be a part of a profitable business. MBAs are now offered around the world; in more recent years, sustainable MBA programs have proliferated, offering students coursework in everything from resource use to sustainable accounting.

Social issues are a critical part of sustainability, and no social impact may be as important as those affecting diversity, inclusion and marginalization.

Companies are routinely accused of underpaying or underrepresenting women, people of colour, Indigenous peoples, people with disabilities and those who identify as LGBTQ+.

Using board diversity in Canada as one measure of the problem, change is happening at a glacial pace.

The number of women on the boards of companies listed on the Financial Post 500 index increased by only one percentage point in 2017 over the previous year, according to research by the Conference Board. Sixty-six per cent of those on the FP500 boards reported as male while 33 per cent reported as female.

There was also a decrease in the number of visible minorities and people who identify as LGBTQ on boards in 2017, it says.

At the same time, 94.4 per cent of those surveyed for the report said they think diversity is important and 86 per cent claimed their board is diverse.

That’s a big disconnect between values and reality. The corporate board room is still very much the domain of straight white men.

Companies with little diversity aren’t doing their shareholders any favours.

A correlation exists between women in corporate leadership positions and high firm performance, a global survey of 21,980 firms in 91 countries published by Washington, D.C.’s Peterson Institute for International Economics in 2016 says.

The survey also discovered that it’s important to have a strong pipeline of female managers capable of taking positions across a company. The correlation between gender diversity and performance was greatest when women were in executive roles, followed by female board members, but the presence of women CEOs had no noticeable effect, the survey says.

To speed up the slow pace will require raising awareness and expanding the pool of diverse business leaders, starting with business schools that can reflect more diverse power structures within the make-up of their faculty.

That’s why Corporate Knights, for the first time, ranked schools on the gender and racial diversity of their faculty.

The research and the results revealed some interesting facts.

For one, some universities in Europe took issue with the metric, arguing that measuring ethnicity further isolates and marginalizes individuals.

At Corporate Knights, where we believe in the adage “what gets measured, gets managed,” we think differently. Allowing important lines of inquiry to proceed without measurable facts will only lead them to languish among society’s and policymakers’ priorities. Leaders need numbers to make the case for change.

Who would have known that two of the most racially diverse business school among the 141 in the ranking would be the University of Connecticut’s School of Business and the Sobey School of Business at Saint Mary’s University in Halifax? Within each school, 51 per cent of faculty identified as visible minorities.

Overall, out of the 20,074 faculty included in the ranking, 24 per cent were classified as racially diverse and 28 were female. Among U.S. schools, 2.5 per cent of faculty identify as black.

Looking at the overall scores, the top-ranked schools are regular contenders for the crown.

This year’s first place sustainable MBA is the Warwick Business School’s program, which tied for second place last year. In second place is the University of Exeter Business School, last year’s first-place winner. The Schulich School of Business at York University dropped from second to third in the 2018 edition of the rankings.

Rounding out the top five is Griffith University’s Griffith Business School in Brisbane and the University of Vermont.

Every school in the top 40 should be proud of its achievement. Beating out over a hundred other leading global schools is not easy.

This year’s ranking was sponsored by international banking group BNP Paribas. We thank them for providing support.

A note on methodology:

The 2018 Corporate Knights Better World MBA Ranking universe automatically includes all schools on the most recent FT100 MBA Ranking. All business schools accredited by the Association of MBAs, AACSB International and EQUIS, as well as all current champions in the United Nations’ Principles for Responsible Management Education initiative, are invited to participate.

The schools were graded on five indicators: institutes and centres, curriculum, faculty research, female diversity and racial diversity. Data for these indicators was collected from publicly available sources. Outreach was conducted to reach the schools for verification and confirmation prior to completion of the ranking.

The institutes and centres indicator was given a weight of 10 per cent and was measured by counting the number of research institutes and centres up to a maximum of five that are fully or substantially dedicated to areas of sustainable development. The ranking (see page 30) points out the number of institutes and centres doing sustainable development research at each business school.

The curriculum indicator, weighted 30 per cent of the final score, was measured by determining the proportion of a school’s mandatory courses in its full-time MBA program that integrate relevant sustainable development themes. The ranking indicates the percentage of courses devoted to sustainable development among all courses.

A school’s research indicator, worth 50 per cent, comes from two sources: the number of peer-reviewed publications in academic journals with sustainable development topics between 2015 and 2017 that were authored or co-authored by a faculty member of the business school, and the number of citations per faculty member. The number of publications was given a 30 per cent weighting while the number of citations received 20 per cent.

To illustrate this indicator, the ranking shows the number of publications and the number of citations with sustainable development as a core theme published at each business school over the past year.

Gender diversity, which is sourced from a school’s website, was given a five per cent weighting. The ranking shows the percentage of women faculty at each business school.

Racial diversity was measured by looking at the percentage of faculty members who can be identified by photo, name or biography as clearly not part of a country’s majority race or ethnic group. The diversity of the school’s faculty was then weighted to account for the overall diversity of the country. where the school is based. This indicator also received a weighting of five per cent.

In the ranking, the racial diversity figure is the percentage of faculty who are not part of a country’s majority race or ethnic group.